Just been looking over the agreement with Xstrata and found the second paragraph below quite interesting...
POTENTIAL SALE OF 51% ROSEBY INTEREST TO XSTRATA COPPER Under the Heads of Agreement, if Xstrata Copper earns its 51% interest in the SEEP, it must then buy from Universal a 51% direct interest in the balance of the Roseby Copper Project, including any mining operation resulting from the RFP. The consideration for this acquisition will be as agreed by the parties at the time or, in the absence of agreement, will be based on an independent valuation.
Xstrata Copper will also have an option, under certain circumstances, to acquire a 51% direct interest in the RFP on the same terms as outlined above.
Now this is pure speculation but perhaps Xstrata have decide to exercise this second option to take the 51% direct interest in Roseby. Valuation of the resource would be far less now than if URL managed to build a mine, Xstrata would effectively avoid taking on 51% of any debt financing to build the mine, and they get their feed for the Mt Isa smelter. The 51% stake means they can veto any move to build a mine and direct the copper where ever they want to. URL gets a bag of cash and conitnues doing what they've done pretty well so far and that's being an explorer.
It's not where URL would ideally like to be but importantly, they survive and can focus on other promising tenaments.
I'm not stating this as fact, I'm just trying to look at things from another point of view. I wish I could find out what those "certain circumstances" are.....
Happy to hear any one elses thoughts?
URL Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
